06.01.202111:16 Forex Analysis & Reviews: Analysis and forecast of EUR/USD for January 6, 2021

Hi dear colleagues!

Daily chart

The euro closed the trading day on January 4 with a plunge and formed a clearly bearish candle with a particularly long upper shadow. Nevertheless, despite such events yesterday the euro bulls managed to revive the upward bias of EUR/USD. So, the pair closed the trading day on January 5 at 1.2296. This is just below the level of 1.2300 which is hard to pass through. 1.2309 still serves as strong resistance. At the moment of writing this article, the euro bulls are still reinforcing their advantage over the bears. Meanwhile, the pair is making efforts to break strong resistance at 1.2309. It is now trading at 1.2330.

The US dollar has been weighed down by the scandal in Georgia where incumbent President Donald Trump insisted that the votes in the presidential election should be reviewed and the missing 12,000 votes should be added to his overall count. Donald Trump is aware that he has lost the presidential election and it is impossible to change anything. Nevertheless, with all his stubbornness he is keen to prove that his victory has been stolen in favor of the Democratic nominee.

Another factor to play against the greenback is that China's authorities decided to abandon the principle of pegging the national currency to the US dollar. Besides, the rally of the stock market yesterday took the shine off the US dollar as a safe haven asset. The most important fundamental data is due at the end of the week. On Friday, the US Labor Department will release nonfarm payrolls. Investors will focus on the unemployment rate, the number of new jobs in the US public and private sectors, and average hourly earnings.

When it comes to the news on the coronavirus front, China has rejected calls from the World Health Organization for an independent international investigation into the origin of COVID-19 on China's territory. Scientists do not recommend the use of different vaccines in Europe. To be more exact, a person should be injected two jabs of the same vaccine.

Now back to technical analysis and trading tips for EUR/USD. In the meantime, the price is developing as expected. The trading idea for long positions has been proved. If case the pair closes above 1.2309 today, traders will be able to expect a further climb of the most popular currency pair. Meanwhile, the odds are for a further advance. Alternatively, if the euro bulls fail to break 1.2309 again and a bearish candle with a long upper shadow and the closing price below 1.2300 appears in the daily chart, the current breakout should be viewed as fake. On this condition, we could be serious about selling EUR/USD.

1-hour chart

In the one-hour chart, it is clearly seen that the euro bulls find it hard to overcome the level of 1.2309. Asian traders made huge efforts to test it, but eventually the pair pulled back to 1.2275. So, traders had the opportunity to buy it at a lower price. Later, the price reversed upward again. At the moment, the pair aims to break the odious mark of 1.2309. Speaking about intraday trading, I would recommend buying EUR/USD after at least three one-hour candles fix above 1.2309. In this case, you would rather buy at a retracement towards this level. That's all for today. Trade at a profit!